The Chamber of Independent Power Producers, Distributors and Bulk Consumers [CIPDiB], wants the government to reconsider its decision to use a proposed two billion dollar energy sector fund to re-finance the existing debt and buy some Independent Power Producers.
The Chamber contends that the move will not augur well for the country’s energy sector, as it is likely to face drawbacks should it be left into the hands of the state entirely.
A statement outlining the concerns of the Chamber however suggested that the proposed fund should be used to settle the outstanding gap in the capacity charges which have accrued since the Public Utilities Regulatory Commission, PURC, has not been allowed to input the charge and set realistic tariffs for electricity.
“Funding the Annual Revenue Gap created by the ignored or deferred capacity charge component in the Public Utility Regulatory Commission’s (PURC’s) tariff methodology, remains the key challenge of the sector. This gap and its cumulative consequence will linger on if a sustainable financing is not arranged,” portions of the statement read.
It added, “The industry practice is clear. IPPs in Ghana did not re-invent the wheel, and so they must not be seen as people who are only concerned with unbridled profit, and as extortionists. PURC’s tariff methodology must rather be reviewed to avoid government’s funding of the Annual Revenue Gap created by the ignored or deferred Capacity Charge component.”
Citi Business News understands that the proposed fund which has been sent to the Finance Committee of Parliament, is yet to be finalized.
Already, CIPDiB is owed to the tune of one billion dollars for power produced and supplied to the Electricity Company of Ghana, ECG and other agencies.
But the Chamber is confident that its ability to participate in the management of ECG, should help members boost their operations while solving the recurrent debt that confronts the energy sector.
“The IPPs who have been a strong backbone to the Ghanaian power sector, committing huge capital to the sector. We rather strongly recommend the participation of IPPs in the Electricity Company of Ghana (ECG); given IPPs proven and tested track record of injecting the requiredfinance to the sector, and making available to Ghanaians reliable power at all times,” the Chamber further noted.